Tax Attorney Fees: Three Billing Arrangements

Hourly fee

Hourly fee

Typical tax attorney fees are at $200 to $400 on an hourly basis. Most of the time, you will be asked to give a prepayment, which is based on the initial number of hours that they will need to work on your case. If your case goes beyond the estimated hours, you will then be billed for the additional hours. For simple cases like an "offer in compromise," you will find that the retainer will be enough to cover everything. However, if you have to go to trial on a tax dispute, expect your hourly fees to reach anywhere from $5,000-$20,000.

Flat rate

If getting your first billing for the hourly tax lawyer fees made you fall off your chair, think about discussing a flat rate payment scheme with your attorney. Here, you just pay a one-time fee and you do not have to worry about anything else. Be prepared for negative repercussions though, because while you have succeeded in paying a flat amount, your attorney is now left with no performance incentive to keep working on your case more than his other clients. If you have a complicated case, you should consider blending the flat fee approach with a performance incentive to keep your lawyer motivated.

Results-based fee

Aside from flat rates and hourly fees, law firms allow for another kind of billing arrangement called the contingency fee. If you have a case where the ruling will be obviously in your favor, then law firms will probably agree to this billing arrangement. Some lawyers are willing to take cases that are results-based, because it can actually earn them more money when they win them. If they are trying to talk you into a high percentage of the tax recovery, then try to talk them into including a low hourly rate combined with a low tax recovery percentage. You should know, however, that you will still have to pay for filing fees, phone charges, and photocopying expenses.

There are many ways that you can negotiate with the lawyer when it comes to his or her tax evasion attorney. Should you be one of those in a situation where no attorney will even try for a results-based fee, then think about possibly hiring a public defendant. Whether you choose to pay for the tax attorney fees hourly, results-based, or as an overall flat fee, you will certainly need an attorney by your side especially when you are dealing with the IRS.

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